East Tennessee Natural Gas 2010 Customer Meeting May 27, 2010 Business Session Agenda 1East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Spectra Energys Form 10-K and other filings made with the SEC concerning factors that could cause those results to be different than contemplated in today's discussion. East Tennessee Natural Gas 2010 Customer Meeting | May 27, 20102 Operational Update and Summary Ryan James Director Capacity Services and Scheduling Statewide Ranks East Tennessee Natural Gas 2010 Customer Meeting | May 27, 20104 East Tennessee Natural Gas Top 25 Delivery Days 1/8 1/10 1/9 1/21 1/12 1/301/4 1/6 1/5 1/31 1/7 2/10 5East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Load Duration Curve - Winter 6East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 East Tennessee Natural Gas Top 25 Summer Delivery Days 8/19 8/18 6/24 7/14 7/15 8/11 8/20 6/24 7/30 7East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Seasonal Peak Demand East Tennessee Natural Gas 2010 Customer Meeting | May 27, 20108 Total Seasonal Deliveries 9East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Cascade Creek Deliveries 10East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Daily Receipt Profile (Excluding Storage) 11East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Outages Madisonville to Topside: May 26 28 and June 1-3 ILI Runs: June 24 and August 31 ILI Results Sept 30 Oct 6 Nora Discharge ILI Results: June Kingsport Lateral Tentative ILI Runs August 17 & 26 Tentative ILI Results Oct Ooltewah to Calhoun ILI Runs June 17 & Sept 8 ILI Results Oct Glade Spring Outage Sept 27 - Oct 1 Rural Retreat Outage Oct East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Pipeline Integrity Paul Sinclair Manager of Pipeline Integrity SE Region Why Pipeline Integrity? Integrity Management Review of Federal Regulations (IMP Rule) Components of Integrity Management Where are the HCAs? Benefits of Integrity Management Questions Review of Federal Regulations (IMP Rule) Dec 17, 2002 Pipeline Safety Act passed by Congress Dec 2003 Integrity Management Rule Applies to Gas Pipelines in High Consequence Areas (HCA) First 50% of HCAs Assessed by Dec 17, 2007 55% complete Balance by Dec 17, 2012 On schedule for completion Reassessment Requirement Maximum 7 Year Interval Components of Integrity Management Create Baseline Assessment Plan (Risk Ranking) Covers Nine Threats Modify Pipelines to Accommodate Inspection Tools Schedule Integrity Assessments In-line Inspection Tools (97%) Direct Assessments (3%) Hydrostatic Tests (Used only for SCC) Response to Integrity Assessments Immediate Scheduled Monitored Where are the HCAs? 211 HCAs on East Tennessee System 92% of Mainline Segments Contain HCAs 39% of Laterals Contain HCAs 5% of Pipeline Mileage within HCAs Benefits of Integrity Management Improved Processes & Procedures Improved Knowledge of Pipeline Facilities Increased Public Safety Increased Reliability Helps Spectra Energy to be North Americas Premier Natural Gas Infrastructure Company Questions East Tennessee LINK Update Robert Gardner Commercial Business Project Lead LINK Systems Customer Service Application Enhancements Some of the more significant enhancements implemented in 2009: Priority Modeling Password Self Service BA Level Nomination Know Your Account Manager (Phase II) Graphical Capacity Release Link Mobile 22East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Customer Service Application Enhancements LINK focus during the first half of 2010 has been Regulatory Compliance. Customer enhancements implemented thus far during 2010: Package ID Confirmations Auto-Confirmation/Upper Limit Phase II Auto-Renominations Customizable Form Functionality PDF Maps Backhaul Courtesy Screen Report Subscription 23East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Customer Service Application Enhancements Sample of enhancements planned for the remainder of 2010: Entity Level Confirmations Automatic Nomination Balancing Integration of Current Customer Usage into LINK Mobile Enhancements to Entitlement Maps Graphical Nomination Priority Communication and Modeling Integrated Excel Functionality Projected Allocations and Imbalances Automatic validation and approval of retro-active adjustments. Ad Hoc Reporting 24East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Customer Service Application Enhancements Potential Enhancements for 2011: Customizable Capacity Release Functionality Customizable Menu Tree Functionality Consolidated/User FriendlyRegistration Continued development of LINK Mobile LINK Whitebox 25East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Customer Service Application Enhancements What enhancements do you recommend for 2011?26East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Training East Tennessee focused group training will be held in Nashville or Knoxville next year. For the rest of the year training will be held in Houston during the months of June, August, October and November. Classes include: The Fundamentals of LINK Advanced Segmentation, Flowing Gas, Capacity Release and Nomination/Confirmations Recent Enhancements, Tips, and Tricks Invoicing and Local Security Administrator27East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Measurement and Gas Quality Sarah Mohammed Manager, Measurement Integrity Gas Quality Update Additional Chromatographs Added the following chromatographs Jewell Ridge Morgan Co 3,7, 9 Columbia Lateral Dickenson 2 Chesapeake Wytheville Midwestern Measurement Report Center Update Sarah Mohammed Manager, Measurement Integrity Measurement Report Center Vision One-stop shop for all measurement related information available hourly Provide comprehensive detail for measurement data Provide ability for analysis User-friendly, easy to navigate, single sign-on. Platform for monitoring gas quality data Benefits Information available on demand ready when you are Data presented graphically for better analysis Gas Chromatograph and volumetric data available hourly Ability to look at multiple meters across multiple months Ability to examine and analyze overall demand and usage Enhanced ability to forecast system load and gas quality Measurement Report Center - Dashboard Yearly/Seasonal Demand Profile Yearly/Seasonal Average Peak Flow Distribution Measurement Report Center Peak Flow Measurement Report Center Flow Trend Measurement Report Center Monthly Measurement Report Center Chromatograph Data Measurement Report Center Chromatograph Analysis Measurement Report Center Future Enhancements To be rolled out by this fall Prior Period Adjustment Reports Automatic Scheduling of Reports To be rolled out first quarter 2011 Reports on your wireless device (PDA, Blackberry etc.) State Governmental Affairs Brian Fahrenthold Director, State Governmental Affairs Spectra Energy Governmental Affairs Report to the General Counsel Vice President located in Washington Three Directors, one federal, two state in the south and north ADVOCACY AND PROMOTE SOUND PUBLIC POLICY Pipeline projects Natural gas use Pass good legislation and kill bad legislation 41East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Kentucky Elections East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Kentucky Elections 2010 U.S. SENATE Bunning retiring U.S. HOUSE Six seats up for grabs, four will remain Republican. GOVERNOR No race, Dem control STATE SENATE 19 seats up, even numbered districts, Republicans maintain control STATE HOUSE 100 seats up, Democrats retain huge control. PRIMARY May 18 GENERAL November 2 43East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Virginia Elections East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Virginia Elections 2010 U.S. SENATE None U.S. HOUSE 11 seats, will remain 5-4 Republican. GOVERNOR No race, Rep control STATE SENATE No races, Dems. control STATE HOUSE No races, GOP control with 2 Ind. PRIMARY June 8 GENERAL November 2 45East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 West Virginia Elections East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 West Virginia Elections 2010 U.S. SENATE No race, Two Dems. U. S. HOUSE Three races, Two Dems. and One Rep. GOVERNOR No race, Dem. control STATE SENATE Dem. control 28-6 STATE HOUSE Dem. control PRIMARY May 11 GENERAL November 2 47East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee Elections East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee 2010 Election Information APRIL 1 - Qualifying deadline for Federal and State positions AUGUST 5 - Primary election NOVEMBER 2 - General election FEDERAL U.S. Senate - None 2 (R) U.S. House - Nine seats 4 (R) 5 (D) STATE Governor - Current (D) State Senate - Odd numbered seats (17 out 33) 19 (R) 14 (D) State House - All (R) 48 (D) 1 (I) 49East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee 2010 Election Information General Political Information Tennessee ranks as the 10 th most conservative state, voting 22.33% more Republican in the 2008 presidential election. Voting patterns since 1992 suggest the state is trending Republican. Tennessee ranks 8 th among the 50 states trending towards the GOP. John McCain carried the state in last presidential election 57% to 42%. Latest Polling 65% of Tennesseans oppose the recently passed federal health care measure. 67% of those polled say it would be better for the country if most incumbents in Congress were defeated in November. Only 30% state the President is doing a good or excellent job. All three top Republican candidates for Governor hold double-digit leads over potential Democratic candidates; however none have polled over 50%. Nearly one-quarter of those polled remain undecided. (Govs race) Republicans could net two more seats from Tennessee. Personal Prognostication A Republican will be the next Governor of Tennessee 50East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee 2010 Election Information Governors Race Republicans Zach Wamp (Congress, Chattanooga) Ron Ramsey (Lt. Governor, Blountville) Bill Haslam (Pilot stations, Knoxville Mayor) Two others Democrat Mike McWherter (son of former Governor) Independents (13) 51East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee 2010 Election Information FEDERAL HD 1: (R) Phil Roe, Michael Sabri vs (D) Michael E. Clark; (I) One HD 2: (R) John J. Duncan, Jr. vs (D) Dave Hancock; (I) Four HD 3: ( Wamp ) (R) Harvey Howard, Tommy Crangle, Van Iron, Art Rhodes, Tim Gobble, Basil Marceaux, Chuck Fleischmann, Jean Howard-Hill, Robin Smith, Grover Travillian, Rick Kernea vs (D) Alicia Mitchell, John Wolfe, Brenda Short, Brent Staton, (I) Six HD 4: (R) Ronald Harwell, Scott DesJarlais, Don Strobng, Jack Bailey, Kent Greenough vs (D) Lincoln Davis (I) Four HD 5: (R) Alvin Strauss, Vijay Kumar, Bob Schwartz, Bob Ries, David Hall, Jeffery Hartline, Patrick Miranda, Jarod Scott, Lonnie Spivak, Tracy Tarum, CeCe Heil vs (D) Eric Schechter, Eric Pearson, Jim Cooper, (I) Eight HD 6: ( Gordon ) (R) Bruce McLellan, Gary Mann, Jim Tracy, Diane Black, Lou Ann Zelenik, Dale Evans vs (D) Devora Butler, George Erdel, Brett Carter, Ben Leming, Henry Clay Barry (I) Five HD 7: (R) Marsha Blackburn vs (D) Greg Rabidoux (I) One HD 8: (R) George Flinn, Randy Smith, Ron Kirkland, Ben Watts vs (D) Roy Herron, Kimberlee Smith (I) Two HD 9: (R) Charlotte Bergmann vs (D) Willie Herenton, Steve Cohen, (I) Two (Incumbents in Bold) 52East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee 2010 Election Information STATE SENATE 1.17 seats up for grab 2.Two Republican incumbents not running: SD 7 (Tim Burchett, Knoxville Mayor) and SD 9 (Dewayne Bunch). The remaining 15 have incumbents in the field. 3.Senate seats up with no opponents: SD 5 (Randy McNally-R); SD 11 (Bo Watson-R); SD 19 (Thelma Harper-D);SD 23 (Jack Johnson-R); SD 33 (Reginald Tate-D). 4.Senate races to watch: SD 7 (Burchett old seat); SD 17 (Beavers vs. Lynn); SD 21 (Doug Henry) 5.Wild cards: Lt. Governor Ron Ramsey running for Governor; Senators Diane Black and Jim Tracy seeking the same Congressional seat. 6.In the end Republicans maintain control STATE REPRESENTATIVES 1.99 seats up for grab 2.Nine incumbents not seeking office: (R-Mumpower, McCord, Campfield, Bell, Rowland and Lynn) (D- Litz, West and Cobb). 90 House members seek re-election. Campfield, Bell and Lynn seeking Senate seats. 3.House races to watch: HD 2 (Shipley vs. Vaughn); HD 3 (Mumpower seat); HD 4 (Speaker Williams running as an Independent); HD 8 (McCord seat); HD 10 (Litz seat); HD 18 (Campfield seat); HD 34 (Rowland seat); HD 57 (Lynn seat); HD 60 (West seat); and HD 62 (Cobb seat). 4.Wild cards: Who becomes Speaker if the Rs take control? Who becomes Speaker if the Ds take control? If there is a tie and Speaker Williams returns, who does he vote for? 5. Republicans could maintain control and Democrats may regain control. 53East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Tennessee 2010 Election Information Source Rasmussen Election * Projection Questions?? 54East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Business Development Update Bill Wickman Director Business Development East Tennessee Natural Gas Current Projects Underway Base Case Facts Scope of Work: Pipe: New Loop miles ; Pickup and Relay 11.7 miles; Lateral to plant 8.5 miles 24 Meter: TVA Plant Regulator Mods: Glade Spring, Flatwoods and Fordtown Schedule: File FERC Application March 2010 FERC Certificate December 2010 Commence ConstructionApril 2011 In-Service DateSeptember 2011 receipt 75,000/ d receipt 75,000/ d 56East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Current State of Capacity ETNG West End Capacity is location specific North Line (3100) is fully subscribed (except Morgan #1 to 3306 522 Dth/d) South Line (3200) has location specific capacity East End Capacity is Limited Some capacity from Saltville and Early Grove to points on 3300 Line Short Term capacity from Saltville to Cascade Creek Supply Lines/Laterals Nora Line remains fully subscribed Jewell Ridge Lateral has a limited amount of capacity Stone Mountain Line has a limited amount of capacity Saltville Storage - Subscribed through March 31, East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Spectra Energy Assets: Well Positioned to Access Changing Supply 58 Supply Basins Supply Flows Emerging Shale Plays Current Supply Pattern 58East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 ETNG Supply - Future 59East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010 Business Development Initiatives Continue expanding ETNG system to meet emerging market needs Explore and develop opportunities to enhance ETNG access to Appalachian Supply Incorporate existing customer growth needs into new expansion projects. 60East Tennessee Natural Gas 2010 Customer Meeting | May 27, 2010